Client Services Login    

About market-linked CDs

How do market-linked CDs work?

Many investors would like to combine the safety and security of a traditional CD with a potential return that is tied to the performance of the market without direct market risk. market-linked CDs provide investors with 100% principal protection when held to maturity. Investors are protected against the loss of principal if the market goes down, while generating potentially positive dividends linked to the underlying asset(s).

What assets can be "linked" to market-linked CDs?

Market-linked CDs can be linked to different underlying assets, such as:
  • Market Index(es)
  • Basket of Stocks
  • Commodities
  • Exchange-traded Funds

How do customers and investors benefit?

Market-linked CDs offer several unique benefits:
  • 100% principal protection when held to maturity
  • FDIC insurance coverage (up to applicable limits)
  • Portfolio diversification
  • Growth potential with limited downside risk
  • Affordable minimum deposit of $1,000

How are market-linked CDs guaranteed?

The market-linked CD is guaranteed by the issuing bank if held to maturity. The original investment is also FDIC insured up to applicable limits.

How are dividends paid?

Instead of paying a fixed rate, market-linked CDs pay interest annually or at maturity based on the appreciation of the underlying asset(s), subject to a participation rate that may vary from issue to issue.

What terms are available to issuing banks?

Terms vary from issue to issue depending on market conditions. Programs available include core deposit, brokered deposit and fee-based.

Are market-linked CDs a new product?

No. market-linked CDs were first issued in 1986.

Who should purchase market-linked CDs?

Market-linked CDs may be appropriate for various types of accounts, including:

    Individual Accounts     Commercial/Institutional Accounts
  • Individual Investors
  • Joint Investors
  • IRAs (Traditional / Roth / Simple / SEP)
  • College Educational Savings
  • Trust & Estate Accounts
  • Caregivers
  • Seniors
  • Wealth Management
  • Private Banking
  • Commercial Accounts
  • Institutional Investors
  • 401(k) & Pension Plans
  • Endowments & Foundations
  • Not-for-Profit Organizations
  • Partnerships & Limited Liability Companies
  • Bank Investment Portfolios

Safety & Growth Potential

Safety & Growth Potential

By combining the safety and security of a traditional CD with the potential for investment return, market-linked CDs are a "must have" for new and existing customers.

Please see the brochure entitled "A Guide to Understanding Index CDs" for further explanation.